The broad bundle of rights that are associated with a musical copyright are known as “music publishing rights.” These rights are not defined by statute but rather are terms recognized in the music industry. Similarly, the concept of the “writer’s share” versus the “publisher’s share” is based in practice, not law. Traditionally, 50% of the income derived from the exploitation of a composition is deemed to constitute the publisher’s share and 50% the writer’s share. Where the author assigns the copyright in the composition to the publisher, the publisher generally collects 100% of the income and, after deducting costs, remits the balance to the author. Other typical types of arrangements between authors and music publishers include co-publishing agreements, under which the copyright ownership is shared by the author (or heir) and publisher; administration agreements, under which the author (or heir) retains the copyright ownership and the publisher administers the rights; and co-administration agreements under which the author (or heir) retains the copyright ownership and co-administers the rights with the publisher. The performing rights societies have subscribed to the distinction between writer and publisher shares and allocate monies accordingly, usually paying the writer’s share directly to the author or his/her heirs.
Music publishing rights are generally understood to include the following:
Non-dramatic or “Small” Performance Rights
- Non-dramatic or “small” performance rights include the rights to authorize non-dramatic performances of compositions over television, radio, and other electronic devices; online transmissions; and non-dramatic live performances.
- Small performance rights are administered by the performing rights societies. In the United States, these societies are ASCAP, BMI, and SESAC.
- Small performance royalties are divided equally between the writer and publisher.
- Royalties derived from the exercise of small performance rights are determined by a formula established by the performing rights society.
- Traditionally, authors were precluded from assigning or selling their writer’s share of small performance rights. This is no longer the case, and in recent years a number of authors and heirs have included the writer’s share of income, including public performance income, in the sale of their catalogues.
Dramatic or “Grand” Rights
- Dramatic or “grand” rights refer to the use of a song in a dramatic context (whether or not the song is originally written for a dramatic musical production). Note that there is no statutory definition of grand rights, and an issue may arise as to whether a particular usage constitutes the exercise of a grand, versus small, right.
- Grand rights are often withheld from grants of rights to the music publisher and are controlled directly by the author or his/her representatives. The royalties derived from the exploitation of grand rights are typically in the form of a percentage of gross weekly box-office receipts or a flat per performance fee.
- Synchronization (“synch”) rights are the rights to include the composition in an audio-visual production, such as a motion picture, television program, television commercial, home video, and DVD.
- Fees are generally in the form of one-time payments, although the arrangement can be a “stepped” deal (e.g., one fee for motion picture use and an additional payment for video rights). In addition, mechanical royalties will be payable if the song is included in a soundtrack album.
- Mechanical rights are the rights to include a composition in a sound recording. Once a song has been published, anyone can record it as long as the statutory mechanical license is obtained and the statutory fee paid.
- In the United States, many copyright owners authorize the Harry Fox Agency to issue mechanical rights licenses on their behalf.
- As of January 1, 2012, the statutory rate is 9.1 cents per composition or 1.75 cents per minute for songs over 5 minutes. This rate is subject to adjustments by the Copyright Royalty Board.
- Despite the statutory minimum, record companies will often insist on paying a rate that is less than the full statutory rate. A rate equal to 75% of the statutory rate is customary. This is true regardless of whether or not the songwriter has written all the songs on the album. Another common practice of the record companies is to limit the number of songs on a particular album for which the author is paid mechanical license fees even if the album contains a greater number of songs. Both the reduction in the mechanical rate and the limitation on the number of songs respecting which the record company will pay royalties is subject to negotiation.
- Print rights are the rights to issue licenses for printed versions of the compositions, including single-song sheet music and folios.
- Print rights may be included in a general grant of rights to a third-party music publisher or may be licensed separately to a company whose primary business is the printing and sale of music.
- The fees payable to the songwriters for the exercise of print rights are typically based on a percentage of retail list price (12.5% is customary).
Concert Rental Rights
- Concert rental rights are the rights to perform works in public.
- Concert performance rights are generally covered by licenses issued by the performing rights societies. However, the rental of full orchestral scores and parts are typically handled by a concert rental agent.
- It is customary for the concert rental agent to retain between 25% and 50% of the rental fees and remit the balance to the writer.
- Concert rental rights may be included in a general grant of rights to a third-party music publisher or may be licensed directly to a concert rental agent.
New Media Rights
- “New Media” is an evolving category of exploitation of musical copyrights.
- New Media rights include all rights not covered by the traditional modes of exploitation.
- New Media rights include digital performance and digital transmission of musical compositions by a variety of means, including digital downloads, ringtones, and interactive streaming.
- The use of a composition in a permanent digital download is recognized as a mechanical right. The Copyright Royalty Board has established that the current statutory rate for the mechanical reproduction of a composition in a permanent digital download is 9.1 cents per composition or 1.75 cents per minute for compositions over 5 minutes in length (the same statutory rate that applies to mechanical reproduction in physical phonorecords).
- The use of a composition in a ringtone is recognized as a mechanical right. The Copyright Royalty Board has established that the current statutory rate for the mechanical reproduction of a composition in a ringtone is 24 cents.
Third Edition. Lisa A. Alter, Esq.